Monday, January 13, 2014

8 possible uses of electronic payment with Bitcoin that you might not know about

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Not too long ago, the decentralised electronic currency known as Bitcoin made news after a US couple decided to travel around the world for 101 days using only this method of payment. This crypto-currency, conceived in 2008 by Satoshi Nakamoto, the pseudonym used by the creator to maintain his anonymity, uses a system of electronic payments with Bitcoin directly between users, doing away with all types of intermediaries. The term coined by this virtual currency used by Austin Craig and Becky Bingham-Craig during their trip, also applies to the protocol designed by Nakamoto and the P2P network that supports it.

Unlike the conventional system, electronic payment with Bitcoin is not backed by any government and does not depend on the trust of any central issuer, but rather uses a proof-of-work system to prevent double spending and achieve the consensus of all of the nodes that make up the network. But lets take a look at a few of the potentially interesting uses of this electronic currency for consumers, and that may encourage us to use it some day in some of the following situations.

One of the most immediate applications is the ability to make purchases online without having to provide all of the personal information that we are normally asked to give during the purchase process, which exposes us to the risk of identity theft or card duplication. In this regard, having our money virtually available 24 hours a day, 7 days a week, without depending on the hours of the banks or the proximity of the closest ATM is a significant advantage.

Making payments with Bitcoin is surprisingly fast and easy - as simple as carrying your smartphone with you and sending Bitcoins from your mobile phone to the seller’s phone using Bitcoin wallet applications to pay in cash with banking applications.

Lately, in these difficult economic times, a lot of people are bothered by the question of bank commissions. In this regard, Bitcoin allows users to make international bank transfers or senddonations and micropayments to anyone in the world at a cost that is much lower than what conventional banks charge.

One of the more controversial aspects of this popular virtual currency is the fact that it allows you to carry your entire savings with you and to pay large sums of money to purchase just about anything, provided that Bitcoin is accepted as a method of payment. With this system, you can buy a new car or even an apartment without the involvement of any third parties and without being accountable to anyone. Just authorise the payment, make the Bitcoin transfer from one account to the other, and done.

This method of payment could be useful for people who do not have a branch office of their bank close by to carry out operations, for example, in the case of developing countries. Even for people who refuse to have a conventional bank account on moral grounds. In these and other cases, opening a Bitcoin account is as simple as installing a Bitcoin wallet application on a smartphone to carry out day-to-day transactions and enjoy the advantages of the online economy without the need to pay hundreds of euros in commissions and maintenance fees of bank accounts and credit cards.

Lastly, there is the mobility of the electronic payment system with Bitcoin, which lets you travel to any part of the world without worrying about how to operate with your money while in a foreign country. Protecting with passwords and encrypting our access keys to Bitcoin, you can travel just about anywhere in the world with the security that your money is available directly and securely. Of course, just like Austin Craig and Becky Bingham-Craig, you have to first make sure that Bitcoin is accepted as a method of payment at your destination.